Commodities: Oil, metal futures recover as dollar pressure eases

Oil and metal futures recovered on Friday, as the dollar weakened marginally with the weekend approaching. The Brent front-month futures contract was up 1.13% or 42 cents at $37.48 per barrel, while WTI was 1.34% or 47 cents higher at $35.42 per barrel, with a weaker dollar boosting commodity prices across the board.

Andrew Kenningham, senior global economist at Capital Economics, noted: “Brent has dropped below $40 per barrel recently but we doubt it will fall much further for any length of time. Instead, we think cuts in non-OPEC supply, including US shale oil, and reasonably strong global demand will lead to a gradual recovery in prices.”

Liz Grant, senior account executive at Sucden Financial, said, “It was “about turn” over the session as metals recovered from the weakness seen on Wednesday, and equity markets were in broad retreat in a “reality check” move following the Fed rate hike.

“Light weekend short covering saw copper moved back up through $4,600 to the upper end of the now, well established sideways trading range and aluminium made a move back above $1,500. As we approach year-end there is tightness creeping in to the nearby spreads i.e. cash- Jan, particularly in lead and aluminium.”

Precious metals also reversed losses with the COMEX gold futures contract bouncing back from six-year lows to post an uptick of 1.44% or $15.10 at $1,064.70 an ounce, while spot gold was 1.49% or $15.70 higher at $1,066.80 an ounce. Away from gold, COMEX silver rose 2.97% or 41 cents to $14.11 an ounce, while spot platinum rose 2.03% or $17.15 at $860.93 an ounce.

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